Multichoice swings to R1.8 billion profit

Multichoice has declared a profit of R1.8 billion for the financial year ended 31 March 2025, with the group benefitting from selling its life insurance business and lower foreign exchange translation losses.

The profit marks a remarkable turn for the company, which declared massive losses of R2.9 billion in 2023 and a R4 billion loss in 2024.

The group said that the return to its favourable equity position came through cost savings and a stabilisation in currencies, benefiting from the rand’s appreciation against the dollar.

Its accounting gain on selling 60% of the group’s shareholding in the insurance business (NMSIS) to Sanlam also helped push it into a profit.

The group gained R3.4 billion on the sale of NMSIS, which contributed massively to the group’s R5.2 billion in profit before tax.

A large tax bill of R3.5 billion brought the group’s overall profit to R1.8 billion.

It said that the previous two financial years had been a period of significant economic disruption for the markets, corporates and consumers in sub-Saharan Africa.

The business was materially affected by structural industry changes in video entertainment, including the rise of of piracy, streaming services and social media.

During this period, the group lost 2.8 million active linear subscribers and had to absorb a R10.2 billion negative impact on its topline due to local currency depreciation against the US dollar.

Management then focused on areas within its control. This led to price increases of 5.7% in South Africa and 31% in local currency in the Rest of Africa to counter the loss in subscribers.

Although this allowed Multichoice to deliver 1% year-on-year “organic revenue” growth in the current financial year, the group’s actual revenue figure in the income statement showed a 9% decrease to R50 billion.

It delivered R3.7 billion in cost savings, well ahead of management’s initial R2 billion target. However, it still saw its operating profit decline by a massive 34% to R4.7 billion.

Its basic earnings increased by over 100% to 1,194 cents, but amidst the likely takeover from France-based Canal+, no dividend was declared during the period.